In spite of critics both internal and external to the country’s parliament, Venezuela’s President, Nicolás Maduro, proceeded with his initiative to launch a pre-sale for petro. According to Maduro, the country sold more than $735 million USD (over $934 million CAD) worth of the digital currency in the first 24 hours. However, the government is yet to provide proof of this figure.  

“The Petro is born and we are going to have a total success for the welfare of Venezuela,” said Maduro, according to the Venezuelan-sponsored media network, Telesur.

Further, the network recently stated that Maduro also intends to launch a second digital currency called ‘Petro Gold’ (also known as Petro Oro).

“Next week I’m going to launch the Petro gold, backed by gold, which is even more powerful, to strengthen the Petro,” he said.

Backing currencies with oil and gold

While Maduro remains vague on details surrounding the upcoming launch of ‘petro gold.’ it seems that the currency will exist as a supplement to the petro token currently available for pre-sale. Most likely, petro gold will follow Maduro’s trend of attempting to liquidate Venezuelan resources through digital currency.

Petro began as an idea pitched by Maduro in late 2017, intending to sell the country’s vast oil reserves by tying them to the value of a new digital currency. According to proponents, the decision aims to remedy the severe economic situation occurring in Venezuela through capitalizing on resources that are plentiful in the country, such as oil.  

The pre-sale began on February 20th, 2018, with Vice President Tareck El Aissami commencing the sale. Purportedly, each unit of petro is tied to the value of a barrel of crude oil.

Maduro remains consistent in his praise for the initiative, adding to previous statements that suggest prosperity for the Venezuelan-backed digital currency.

“The largest and most important companies and blockchain in the world are with Venezuela, we are going to sign agreements,” said Maduro on Twitter. “Six weeks ago I announced the creation of the Venezuelan cryptocurrency.”

Sanction dodging

However, critics of Petro remain prevalent despite the pre-sale being underway. Leaders of Maduro’s opposition party previously called the initiative an illegal attempt for Maduro to sell resources that are not his.

“This Assembly tells the world that the cryptocurrency the government wants to issue is illegal,” said the opposition party in January of 2018. “This parliament will come out in front to prevent public opinion falling into that trap.”

The United States continues to warn investors against getting involved with petro, stating that the act could be in violation of sanctions preventing the extension of credit to the Venezuelan government.

These warnings to potential investors are not surprising, as Maduro is seemingly upfront about his intent to dodge U.S. sanctions. According to Reuters, Maduro is hoping that the Petro will allow the country to persevere against an “economic war” created by his opposition and the United States.

 

Image credit: Petro logo

 

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